Earlier this month, the panel appointed by President Obama to study the causes of last year’s Gulf of Mexico disaster released its final report, declaring that a “culture of complacency” in the government and energy companies set the stage for the spill. The National Commission on the Deepwater Horizon Oil Spill and Offshore Drilling, co-chaired by William K. Reilly, a Republican and former Environmental Protection Agency (EPA) administrator under President George H.W. Bush, and former Senator Bob Graham (D-Fla.), also made a series of recommendations to improve drilling oversight and restore damaged areas of the Gulf Coast.
Reilly says he hopes the new Congress will not impede the Obama administration from carrying out the reforms recommended by the commission, which include creating an “impermeable” wall between the federal officials charged with collecting revenues from offshore drilling and those responsible for safeguarding the environment. Another key recommendation, says Reilly, is the creation of an industry body that will establish stringent safeguards for offshore drilling and ensure they are carried out.
As Reilly sees it, the massive fines to be paid by BP should largely be used to fund a program to restore the Louisiana coast, which has suffered severe erosion and pollution problems from 60 years of offshore drilling. “The risk we face,” says Reilly, “is that the country’s span of attention will not maintain support for attending to this spill and its consequences.”
Yale Environment 360: In a nutshell, is it possible to say why this happened? What went wrong here?
William K. Reilly: There are two ways of looking at what went wrong. What went wrong on the rig itself in the days and hours leading up to the explosion was a series of bad decisions by three companies. What went wrong in the broader context is an industry, which had not been a high-risk industry when it was drilling in shallow water, became such as it moved down to depths of a thousand feet or more without having adjusted its response capability, its containment technology, to manage those new risks. And government did not do an effective job of keeping up with the industry as it developed very dynamically.
e360: The report documents problems with BP’s safety record. [In 2005, an explosion at its Texas City, Texas, refinery killed 15 workers; in 2006, a hole in a corroded BP pipeline in Alaska resulted in a major oil spill.] Why do you think BP was unable to address its safety issues before this disaster?
Reilly: BP is a very large company — the largest, in fact, in terms of offshore oil and gas exploration — and it fell into a pattern of severe cost-cutting in the late 1990s. My understanding is that in the era of $9 oil
The inspectors are not really any match for the people they’re inspecting.”— everybody’s forgotten that, but there was $9 per barrel oil in the late 1990s — BP became excessively concerned with cutting costs and they did it quite irresponsibly with respect to the refinery in Texas City. I think that that culture continued on into the era that followed Lord Browne [former BP CEO John Browne, who resigned in 2007]. It was he who oversaw that cost-cutting. Tony Hayward, I think, was trying to fix the problem. He just didn’t get to it. And that culture did not change.
e360: Is it changing now?
Reilly: They certainly have had every reason to focus laser-like on improving their safety and environmental performance, and I would be very surprised if in 3 to 5 years they are not among the safest oil companies. That was the experience that Exxon displayed after the Exxon Valdez tragedy: They became probably the leader, or one of them, in terms of safety and environmental protection among the oil companies. The BP people are smart and they are clearly going to have to do likewise.
e360: The report describes serious problems with the Minerals Management Service, the Interior Department agency that oversaw offshore drilling. The Obama administration recently announced a new structure for the agency, splitting it into two different entities, one to collect revenue, the other to oversee permitting, safety, and the environment. Does that begin to address some of the problems, and what else needs to be done?
Reilly: The old MMS has a long history of being underfinanced, under-resourced, under-trained and under-compensated professionally. All that has to change. It will take time. The reality is the inspectors are not really any match for the people they’re inspecting. We’ve got to make them at least better trained and more capable to carry out the job the law gives them. Whether or not we are able to complete the reforms which the Interior Secretary has begun, reforms which I applaud and admire, really depends now on Congress. The president has asked for $100 million. Something like $30 million was appropriated. That’s got to be improved.
e360: You’ve also stressed the need for politically independent science and regulation.
Reilly: Historically, revenues have driven this program, and safety and environment have been subordinate. Three MMS directors essentially said that before our commission. We will not be confident that that can’t
“As Tony Hayward told me, the response capability was wholly inadequate to the size of the spill.”happen again until there is an absolutely impermeable wall between the revenue generation and the environment and safety regulation. We’ve simply got to recognize the reality and have a sustainable situation without any temptation to let revenues affect regulation. There’s going to have to be an independent entity within the department, run by someone who is appointed and confirmed for a term, and not serving at the pleasure of the president or the secretary.
e360: Is there any sympathy for that in the new Congress, where Republicans are playing a much bigger role?
Reilly: I don’t know. They are continuing to consider that, even as they move on these other reorganization proposals. But they’ve not gotten to the point where we on the commission are.
e360: Taking a step back, was there a sense both with people working on the rig, and also with MMS and the companies, that something this bad couldn’t happen?
Reilly: Neither folks in the industry nor the government thought that anything like the Macondo explosion and blowout could occur. They just thought it couldn’t happen. That helps explain why, first of all, there was no subsea containment capability. As Tony Hayward told me when I began my work on the commission, the response capability was wholly inadequate to the size of the blowout and the size of the spill. The response plans were laughable. The concerns for walruses, for example, in the Gulf. That, to me, bespeaks the culture of complacency.
e360: You’ve also recommended there be an industry safety body that self-polices. Can you elaborate?
Reilly: That is a very important recommendation. The nuclear industry, after Three Mile Island, established something called the Institute for Nuclear Power Operations. It evaluates, monitors and even grades reactor managers, and its grades are highly respected by the industry itself. It’s a high-risk industry that has been made safe. Aviation did the same thing after the 1950s. In 1955, only 20 percent of Americans indicated in a poll that they were even willing to fly. Fifty-five percent said they wouldn’t fly
“Clearly we have learned you cannot count on government to protect us from incompetence on the part of industry.”under any circumstances. The aviation industry had 12 to 15 serious accidents a year. The FAA got together with the manufacturer, Boeing, and they figured out how to improve safety with better training for pilots, better monitors in the cockpits, better navigation instrumentation, a whole range of things, safety practices. So the lessons are there. The chemical industry did something similar after Bhopal with responsible care. The oil and gas industry has not done it and they need to do it for two reasons. One, clearly we have learned you cannot count on government to protect us all from misbehavior or incompetence on the part of industry. Government’s not up to that. Secondly, the best companies have the strongest interest in it, because irrespective of their own performance, if there is a laggard or a corner-cutter who gets in trouble, as we saw in the Gulf, everybody’s rigs will be shut down.
e360: Are they moving to set something up?
Reilly: The day after our report’s release I went to Houston and met with about 60 companies. The reaction made clear that they are very seriously looking at the safety institute and considering if they were to do it, the kind of things they would have to do, how it would be structured, what the budget would cost and who would pay it, where it would be housed, and all the practical questions.
e360: Can you talk about the lack of environmental oversight in offshore areas of the Gulf of Mexico?
Reilly: We heard the director of NOAA and also the chairman of the White House Council on Environmental Quality admit before our commission that they were not consulted in the [Obama administration] decision to expand areas of the Atlantic coast and eastern Gulf for offshore oil and gas exploration and development, which had not been permitted for 20 years or so. [The decision was suspended after the spill.] That was a bit of a shocker. That would not have happened, say, in the Nixon Administration when Russell Train was the chairman of the Council on Environmental
e360: Let’s move on to the aftermath and the response. What were the main problems in the response in terms of attempts to cap the well and emergency cleanup operations?
Reilly: It was a very high-pressure formation that was flowing at a very rapid rate. The failure to determine the flow rate, the underestimate of it, caused the company to believe that it could contain it with a “junk shot,” where the golf balls and rubber tires and things were thrown down into the well, and were wholly ineffective. Had they been clear on the flow rate, they would have known that would not have worked. When they finally did get some clarity on it, they developed a “top hat” containment that did work.
In terms of the response itself, the cleanup and capture of spilled oil, I was really shocked to see that that technology had not developed in 20 years, since I saw it in Prince William Sound [site of the Exxon Valdez spill]. Skimmers did not work in Prince William Sound. They were dead in the
“In terms of the response itself, I was really shocked to see that technology had not developed in 20 years.”water, from what I saw, because of the high wave and wind action — skimmers are essentially designed for placid harbors. And they didn’t work much in the Gulf. I think the whole flotilla, and there were hundreds of boats deployed, they collected something like 6 percent of the spilled oil. Clearly that’s one more sign of complacency on the part of government and industry that that technology didn’t advance. In the last 20 years, money that was appropriated for it in the early years after the Exxon Valdez gradually eroded away with not an especially effective evolution as a result.
e360: Have we learned more on how to collect oil from the Gulf response?
Reilly: Frankly, I don’t think we’ve learned too much. There are some improvements in the skimmers and in the oceangoing booms since the spill began, but our knowledge of how to do that is somewhat primitive.
e360: The EPA’s use of the dispersant Corexit to break up oil slicks has been very controversial in the environmental community. Was that a responsible decision?
Reilly: I was very skeptical of dispersants and did not permit them to be used in sensitive areas in Prince William Sound 20 years ago. And my prejudice was great going into this affair. I concluded reluctantly that the decision to use them in this instance, given the very high volume of the oil and the need to protect some very delicate and fragile wetlands and marshes along the coast, did justify their use. In the commission’s report we do not disapprove of that decision by the EPA administrator.
What is really difficult to justify is, there was a debate about the toxicity of the dispersant used only after the spill had occurred. It struck me at the time, it was oddly inverted that you have that debate when you’ve got a serious, real-time need for dispersants. There’s no reason that could not have been tested before and a determination been made about whether under certain circumstances it would be appropriate to use Corexit in the Gulf. That is one more sign of the degree to which the government was unprepared.
e360: What do we know about the long-term effects of the dispersant, and the oil itself, on marine life?
Reilly: I think we are uncertain about how long there may be effects on fish life, particularly on those creatures like oysters and crabs that could not escape the oil that may have been deposited upon them and their larvae. That is going to take some time. What that really argues for is a fund that provides, as we did after Exxon Valdez, for long-term monitoring of effects. To the extent we know what happened to species in Prince William Sound, it’s because that funding was there to support that research. We need to do that in the Gulf.
e360: After the well was capped, much — though not all — of the oil evaporated or was dispersed. Were the environmental impacts less than you feared earlier on in the process?
Reilly: The volume was such that one had to assume it would take quite some time for it to disappear, to evaporate, or even to actually come to rest on the bottom. The ecology of the Gulf and the capacity of bacteria there to consume hydrocarbons wasn’t adequately understood or appreciated by
The risk we face is that the country’s attention span will not maintain support for attending to the spill and its consequences.”most of us. It’s clear that the bugs did the best job of any response in getting rid of the oil. I have to say I was surprised it seemed to go so fast. Having said that, there have been substantial trace amounts of oil — in the parts per billion range — that could nevertheless have some consequences for the ecology. We don’t really know that, but it’s not fair to assume that simply because you can’t see it any longer, it’s no longer there. It’s potentially a cause of distress to one or more species that ingest it. That’s one of those questions that will have to be answered by monitoring.
e360: Louisiana Governor Bobby Jindal lobbied aggressively for emergency sand berms that later proved ineffective at stopping oil from reaching the coast. Can you comment?
Reilly: The berms, in our view, did not play any serious role in the response and should not have been authorized as a response technology. In fact, only a relatively short piece of the original berm plan was even in existence by the time the well was plugged. And that was predictable, that it was going to take six months or more to build those berms, and they are substantially unbuilt. They were very much the favored choice of the governor and of parish presidents and I think the federal government eventually accommodated strong local opinion and local government relations there in acquiescing in their construction. BP, after all, was prepared to pay $360 million for them. There was no federal money involved. But that should not be assumed to be a constructive response to any future spill.
In my view, Louisiana officials were quite shrewd. That money they got for berms is now being spent substantially on beach replenishment, which was probably their primary interest all along.
e360: Your report recommends channeling substantial funds to coastal restoration. Why?
Reilly: We recommend that 80 percent of the fines be directed to the area most affected and most damaged over the years by all sorts of things: oil and gas, floodworks, and dredging. That seems to us a quite reasonable proposition: that the fines for doing damage to a region be spent on restoring that region. We’ve known for many years the good projects that
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e360: Going forward, what are you most concerned about? What’s the risk we face right now?
Reilly: The risk we face is that the country’s span of attention will not maintain support for attending to this spill and its consequences. That Congress, in an anti-regulatory mood, will confuse the kinds of regulatory problems we’ve had there with the defects of regulation and not recognize that some additional regulation, smart regulation, is going to be necessary to avert catastrophe in the future. That the industry will go back to business as usual. After all we went for 20 years without a spill of national significance in our offshore waters. To the extent we begin to not experience catastrophe again, we may be lulled into acceptance and quietude and to go on to other things. This could happen again, if we don’t really learn its lessons.